Warren Buffett’s ‘World’s Largest Solar Power Development’ Underway near LA

It’s being billed as the “world’s largest solar power development,” the joint construction effort started in January by Berkshire Hathaway’s MidAmerican Solar and SunPower Corp. north of downtown Los Angeles in Kern and Los Angeles counties. Officially called the Antelope Valley Solar Projects, the 3,230-acre development in two co-located projects are scheduled to generate 579 megawatts, or enough energy to power 400,000 average California homes or about 2 million people.

MidAmerican Solar is a subsidiary of MidAmerican Energy Holdings Co., which is controlled by Berkshire Hathaway. Warren Buffett is the primary investor, chairman and CEO of Berkshire Hathaway.

The two companies calculate that the electricity powered by the project will displace an estimated 775,000 tons of carbon dioxide annually, which they say is equal to taking about 3 million cars off the road over the next 20 years. MidAmerican  owns the development and SunPower is the designer, engineer and contractor for the construction and will operate and maintain the project. Southern California Edison is the customer that will purchase the power when it is completed by year-end 2015.

One of the other big solar power stories  of the week, “The Incredible Shrinking Cost of Solar Energy “(http://www.juancole.com/2013/05/incredible-shrinking-projects.html notes that thanks to the “dramatic fall in the cost of solar power generation” solar is at grid parity in many parts of the world, including Germany, Portugal, Italy and Spain, as well in the southwestern U.S.

Other data points in these stories include:

  • The cost of the best Chinese solar panels fell in cost by 50 percent between 2009-2012. Over the next two years, cost reductions will “slow” to a 30 percent rate.
  • By 2015 solar panels are expected to fall to 42 cents per watt.
  • U.S. solar installations rose 76 percent in 2012.
  • Hybrid plants that include both solar and wind turbines dramatically increase efficiency and help integrate into the electrical grid.

Given some of the interesting developments in solar power, how have some of the solar stocks fared in the past few months?

San Mateo, CA-based SolarCity Corp. (Nasdaq: SCTY, http://www.solarcity.com/ designs, installs and sells or leases solar energy systems to residential and commercial customers, as well as electric vehicle charging products.  It closed March 15 at $16.74 with a market cap of $406.5 million. By April 12 it was trading at $19.97 with a market cap of $1.5 billion. SCTY closed May 8 at $24.16, up 50 cents for the day with a market cap of $1.8 billion. Its 52-week trading range is $9.20-$28.23.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com/ ), which sells a variety of solar products, closed back on March 15 at $3.50 with a market cap of $151 million. It closed April 12 at $4.07 with a market cap of $176 million. CSIQ closed May 8 at $5.29, down 17 cents for the day, with a market cap of $228 million. Its 52-week trading range is $1.95-$6.09.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR, http://www.sunpowercorp.com/), which makes a wide variety of solar products and systems and is one of the principals in the Antelope Valley Solar Project, closed back on March 15 at $11.80 with a market cap of $1.4 billion. SPWR closed April 12 at $11.06. It closed May 8 at $15.36, down 6 cents for the day, with a market cap of $1.8 billion. Its 52-week trading range is $3.71-$16.04.

China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/) designs, manufactures and sells photovoltaic modules worldwide. Back on March 15, TSL closed at $4.11 with a market cap of $291 million. It closed April 12 at $4.19 with a  market cap of $335 million. TSL closed May 8 at $4.72, down 22 cents for the day. Its 52-week trading range is now $2.04-$7.67.

China-based Yingli Green Energy Holding Co. (NYSE: YGE, http://www.yinglisolar.com/ makes photovoltaic products including cells, modules and systems. YGE closed back on March 15 at $2.47 with a market cap of $387 million. It closed April 12 at $2.12 with a market cap of $324 million. YGE closed May 8 at $2.20, down 7 cents for the day, with a market cap of $356 million. Its 52-week trading range is $1.25-$3.68.

China-based Suntech Power Holdings (NYSE: STP, http://am.suntech-power.com/), the world’s largest producer of solar panels, closed at $0.70 back on March 15 with a market cap of $127 million. It closed May 8 at $0.51, down 7 cents for the day, with a market cap of $92 million. Its 52-week trading range is $0.30-$2.67.

St. Peters, MO-based MEMC Electronic Materials (NYSE:WFR, http://www.memc.com/) manufactures and sells silicon wafers and photovoltaic materials. Through SunEdison, it’s a developer of solar energy products. It closed March 15 at $4.53 with a market cap of $1 billion. WFR closed April 12 at $4.76 with a market cap of $1 billion. WFR closed May 8 at $5.33, down 6 cents for the day, with a market cap of $1.2 billion. Its 52-week trading range is $1.44-$5.70.

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Obama Budget Proposes Big Increases for Spending on Clean Energy

Photo courtesy of KMBC.com

Photo courtesy of KMBC.com

President Barack Obama’s fiscal year 2014 budget proposal made headlines this week mainly for its changes to Social Security, but the increases proposed in US government support for clean energy spending did not go unnoticed. Reuters News Service called the increases for electric cars, wind power and other green technology “dramatic,” particularly because they arrive in the face of Republican criticism.

While many government agencies get slimmed down in the budget proposal, the Department of Energy would get an 8 percent increase to $28.4 billion next year, Reuters reported. Included are a 75 percent increase in spending on advanced vehicles to $575 million and a 29 percent increase in spending on the ongoing effort to integrate solar and wind power into the national electric grid, Reuters reported. Support for biofuels would increase by 24 percent.

“These increases in funding are significant and a testament to the importance of clean energy and innovation to the country’s economic future,” the Obama administration wrote in the budget proposal, according to the Reuters report.

While Republicans have criticized the US backing of companies like Solyndra, a solar panel maker that went bankrupt, and Fisker Automotive, a hybrid sports care maker which is struggling and laying off employees to hold off bankruptcy, President Obama has maintained that clean energy is a key to the country’s future.

Government support for the clean energy industry “has nearly doubled (the US) energy generation from wind, solar, geothermal and other renewable energy sources” since Obama took office in 2008 and maintaining this level of support “could lead to breakthroughs in the years to come,” Reuters reported.

We’ve been following several wind and solar energy companies, including:

Newbury Park, CA-based Sauer Energy (OTC: SENY, http://www.sauerenergy.com/) is a development stage company developing vertical axis wind turbines for commercial and residential uses. Formerly BCO Hydrocarbon Ltd., the company disposed of its oil and gas interests and in July 2010 purchased Sauer Energy and in May 2012 purchased Helix Wind Corp. Back on Dec. 24 it was trading for $0.24. It closed April 12 at $0.10, down 1 cent for the day. Its market cap is now $9 million and 52-week range is $0.08-$0.39.

China-based China Ming Yang Wind Power Group (NYSE: MY, http://www.mywind.com.cn/) is a wind turbine manufacturer focused on designing, manufacturing, selling and servicing megawatt-class wind turbines. Last July, MY announced it was considering a joint venture with China-based Huaneng Renewables Corp. to develop wind power and solar power projects in China and overseas markets. MY stock closed Dec. 24 at $1.21. It closed April 12 at $1.35, up 1 cent for the day. Its market cap is now $169 million and 52-week trading range is $1.06-$2.47.

Chatsworth, CA-based Capstone Turbine Co. (Nasdaq: CPST, http://www.capstoneturbine.com/) develops and markets microturbine technologies, including technologies used to provide on-site power generation for wind power. It closed Dec. 24 at $0.91 with a market cap of $278 million.CPST closed April 12 at $0.93, down 4 cents for the day. Its market cap is now 282 million and 52-week trading range is $0.73-$1.20.

San Mateo, CA-based SolarCity Corp. (Nasdaq: SCTY, http://www.solarcity.com) designs, installs and sells or leases solar energy systems to residential and commercial customers, as well as electric vehicle charging products.  It closed March 15 at $16.74 with a market cap of $406.5 million. SCTY closed April 12 at $19.97, down 41 cents for the day. Its market cap is now $1.5 billion and 52-week trading range is $9.20-$21.40.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com/ ), which sells a variety of solar products, closed back on March 15 at $3.50 with a market cap of $151 million. It closed April 12 at $4.07, down 3 cents with a market cap of $176 million. Its 52-week trading range is $1.95-$5.15.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR, http://www.sunpowercorp.com/), which makes a wide variety of solar products and systems, closed back on March 15 at $11.80 with a market cap of $1.4 billion. SPWR closed April 12 at $11.06, up one cent for the day. Its market cap is now $1.8 billion and its 52-week trading range is $3.71-$13.88.

China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/) designs, manufactures and sells photovoltaic modules worldwide. Back on March 15, TSL closed at $4.11 with a market cap of $291 million. It closed April 12 at $4.19, up one cent, with a  market cap of $335 million. Its 52-week trading range is now $2.04-$7.99. 

China-based Yingli Green Energy Holding Co. (NYSE: YGE, http://www.yinglisolar.com/) makes photovoltaic products including cells, modules and systems. YGE closed back on March 15 at $2.47 with a market cap of $387 million. It closed April 12 at $2.12, down 5 cents, with a market cap of $324 million. Its 52-week trading range is $1.25-$4.12.

China-based Suntech Power Holdings (NYSE: STP, http://am.suntech-power.com), the world’s largest producer of solar panels, closed at $0.70 back on March 15 with a market cap of $127 million. It closed April 12 at $ 2012, and then rose to $1.87 in early January, but has been falling since. STP closed March 15 at $0.75, udown 12 cents for the day, with a market cap of $135 million. Its 52-week trading range is $0.30-$2.96.

St. Peters, MO-based MEMC Electronic Materials (NYSE:WFR, http://www.memc.com) manufactures and sells silicon wafers and photovoltaic materials. Through SunEdison, it’s a developer of solar energy products. It closed March 15 at $4.53 with a market cap of $1 billion. WFR closed April 12 at $4.76, down 6 cents, with a market cap of $1 billion. Its 52-week trading range is $1.44-$5.70.

Is Outlook Sunny for Solar Stocks in 2013?

Photo courtesy of blog.heritage.org

Photo courtesy of blog.heritage.org

The big news for the solar industry this week came in a report from the Solar Energy Industries Association noting that “solar panel installations in the U.S. surged 76 percent in 2012.” That number was driven largely by growth in residential and commercial projects, and a boom in “larger, utility scale (solar) plants,” according to Investor’s Business Daily (http://news.investors.com/technology/031413-648050-solar-installations-up-but-forecast-slowing.htm?ven=yahoocp,yahoo).

The same report cited a slower growth forecast for 2013 of around 30 percent, “amid falling prices for solar products,” according to the IBD story, which is packed with interesting factoids about the industry:

  • Solar was installed in “nearly 83,000 homes in 2012”
  • From 2009-12, the U.S. solar industry grew at a compound annual growth rate of 82 percent
  • The forecast for solar industry growth from 2013-16 is 28 percent
  • A record 3,313 MW of solar photovoltaics were installed in 2012
  • The solar capacity that went online in 2012 “amounts to more than 40 percent of the nation’s entire existing capacity.”

So what does this mean for an investor in solar companies, many of them small caps? Apparently there’s still an oversupply globally of solar panels, prices have continued to fall “amid tech innovation, economies of scale and overcapacity, and price wars “mean manufacturers are producing panels at about half their normal capacity.” All this is bad for manufacturers but good for end-users “as the cost of using solar energy gets closer to parity with fossil-fuel energy sources.” 

Certainly investors could have done a lot worse than bet on solar stocks (particularly SPWR) since the beginning of 2013. While many have seen prices dip from highs in early February and March, a look at recent returns over the past six months shows that those who have been riding the solar wave since then have generally had a good run, although it seems to be easing up in recent weeks. The question is now, will it continue through 2013?

Here are a few of the small cap names we have been following:

San Mateo, CA-based SolarCity Corp. (Nasdaq: SCTY, http://www.solarcity.com) designs, installs and sells or leases solar energy systems to residential and commercial customers, as well as electric vehicle charging products. Back on Dec. 20, 2012, SCTY was trading for $10.67 and its run started from there. By March 6, 2013 SCTY was nearly $20. It closed March 15 at $16.74, up 14 cents for the day, with a market cap of $406.5 million. Its 52-week trading range is $9.20-$20.38.

Tempe, AZ-based First Solar (Nasdaq: FSLR, http://www.firstsolar.com/), which specializes in thin-film solar modules, is not a small cap as we define it but we include it for comparison purposes. Back in late September FSLR was trading for about $20 and was as high as $36.13 in February before it fell. It closed March 15 at $26.61, down 65 cents, with a market cap of $2.2 billion. Its 52-week trading range is $11.43-$36.98.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com/ ), which sells a variety of solar products, closed back in late September 25 at about $3 with a market cap of $130 million. It got above $5 by mid-February and then dipped like many of the others. It closed on March 15 at $3.50, down 3 cents for the day, with a market cap of $151 million. Its 52-week trading range is $1.95-$5.15.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR, http://www.sunpowercorp.com/), which makes a wide variety of solar products and systems, closed back on Sept. 25 at $4.60 with a market cap of $547 million. SPWR closed March 15 at $11.80, down 24 cents for the day, with a market cap of $1.4 billion. Its 52-week trading range is $3.71-$13.88.

China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/) designs, manufactures and sells photovoltaic modules worldwide. Back in mid-December, TSL was trading for about $3.95, ran up to $5.81 in early January, but has tumbled since. It closed March 15 at $4.11, up 1 cent for the day, with a market cap of $291 million. Its 52-week trading range is $2.04-$8.68. 

China-based Yingli Green Energy Holding Co. (NYSE: YGE, http://www.yinglisolar.com/) makes photovoltaic products including cells, modules and systems. YGE closed back on Dec. 21 at $2.18, then ran up to $3.49 by mid-February, but it, too has been dropping since then. It closed March 15 at $2.47, up 7 cents for the day. Its market cap is now $387 million and 52-week trading range is $1.25-$4.60.

China-based Suntech Power Holdings (NYSE: STP, http://am.suntech-power.com), the world’s largest producer of solar panels, closed at $0.92 back on Sept. 25, 2012, and then rose to $1.87 in early January, but has been falling since. STP closed March 15 at $0.70, up 3 cents for the day, with a market cap of $127 million. Its 52-week trading range is $0.41-$3.68.

St. Peters, MO-based MEMC Electronic Materials (NYSE:WFR, http://www.memc.com) manufactures and sells silicon wafers and photovoltaic materials. Through SunEdison, it’s a developer of solar energy products. In early November, WFR was trading as low as $2.18 and then hit a recent high of $5.66 in mid-February. It closed March 15 at $4.53, down 24 cents for the day, with a market cap of $1 billion. Its 52-week trading range is $1.44-$5.70.

Large Cap Siemens AG Leaves Solar Business to ‘Specialized Companies’

Citing “sinking prices and  cutbacks in government support for solar-thermal projects,” Siemens AG announced this week that it was exiting from the solar power business but would continue its alternative energy focus on wind and hydro power, according to several newspapers including the Wall Street Journal (http://online.wsj.com/article/SB10001424052970203406404578072493375180894.html?KEYWORDS=siemens+vanessa for subscribers). The much publicized austerity measures throughout Europe, the glut of solar panels that have devastated market prices for panels and cutbacks in solar-thermal projects all played a role in this decision, the WSJ reported. 

Photo courtesy of Siemens AG

It was just three years ago that Siemens paid $418 million for Israel-based Solel Solar Systems as well as a stake in Italy-based Archimede Solar Energy, according to the WSJ report. The solar announcement comes on the heels of Siemens previous decision to shelve its nuclear power ventures.

Michael Suss, a Siemen energy division head, suggested that “only specialized companies” will thrive in today’s solar market. Siemens was focused on solar-thermal technology, “which unlike solar panels, uses the sun’s rays to heat water in large-scale projects, turning it into steam” to generate electricity.” the WSJ report noted. Siemens is apparently in talks to sell off the solar division of its business.

It was only a month ago we took a look at a few small cap solar stocks (call them “specialized companies”), which back then were struggling with many of the same issues as giant Siemens (73.5 billion Euros in annual revenues during its last fiscal year) and trying to keep from being delisted by Nasdaq and the NYSE. So let’s see what’s happened since.

Tempe, AZ-based First Solar (Nasdaq: FSLR, http://www.firstsolar.com/), which specializes in thin-film solar modules, is not a small cap but we include it anyway. FSLR closed Sept. 25 at $20.51. FSLR closed Oct. 23 at $23.31, down 49 cents, with a market cap of $2 billion.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com/ ), which sells a variety of solar products, closed Sept. 25 at $3.01 with a market cap of $130 million. CSIQ closed Oct. 23 at $2.61, up 1 cent, with a market cap of $112.6 million.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR, http://www.sunpowercorp.com/), which makes a wide variety of solar products and systems, closed Sept. 25 at $4.60 with a market cap of $547 million. SPWR closed Oct. 23 at $4.34, down 4 cents, with a market cap of $516 million.

China-based LDK Solar Co. (NYSE: LDK, http://www.ldksolar.com/) manufactures solar products and silicon materials. LDK closed Sept. 25 at $1.25 with a market cap of $167 million. LDK closed Oct. 23 at $0.88 with a market cap of $117 million.

China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/) designs, manufactures and sells photovoltaic modules worldwide. It has a chart similar to many of the other solar stocks, which reached highs in the summer of 2011. TSL closed Sept. 25 at $4.47 with a market cap of $316 million. TSL closed Oct. 23 at $4.42, up 12 cents, with a market cap of $312 million.

China-based Yingli Green Energy Holding Co. (NYSE: YGE, http://www.yinglisolar.com/), which makes photovoltaic products including cells, modules and systems, closed Sept. 25 at $1.74 with a market cap of $272 million. YGE closed Oct. 23 at $1.72, up1 cent, with a market cap of $269 million.

China-based Suntech Power Holdings (NYSE: STP, http://am.suntech-power.com), the world’s largest producer of solar panels, closed at $0.92 on Sept. 25. STP closed Oct. 23 at $0.85, up 3 cents, with a market cap of $154 million.

Struggling Solar Stocks at Risk of Being Delisted

The announcement this week that China-based Suntech Power Holdings (NYSE: STP), which bills itself as “the world’s largest producer of solar panels,” is at risk of being delisted by the New York Stock Exchange, cannot be good news for the solar industry. The announcement came about a month after Suntech founder Zhengrong Shi surprised analysts by stepping down as CEO. He remains Chairman and Chief Strategy Officer.

Suntech stock, which was trading for $2 the last time we checked in May, closed Sept. 25 at $0.92, down 9 cents for the

Photo courtesy of nrel.gov

day. Per NYSE rules, Suntech has six months following the NYSE warning (which came Sept. 10) to get its average stock price back up over $1 over a 30-day period.

China-based JA Solar (Nasdaq: JASO), which bills itself as “China’s largest solar-cell maker,” is also being threatened with a delisting. JASO announced Sept. 24 that it is seeking to strengthen its balance sheet by buying back $89.2 million of its debt. It last closed above $1 on Aug. 28. JASO closed Sept. 25 at $0.85, no change for the day.

This gloomy news prompted us to take a look at several other solar stocks we have followed in the past. They include:

 Tempe, AZ-based First Solar (Nasdaq: FSLR, http://www.firstsolar.com/), which specializes in thin-film solar modules, has bounced back from its year-long slide. FSLR traded as high as $142 during the summer of 2011, but fell down to $13.66 when we last checked in May. FSLR closed Sept. 25 at $20.51, 49 cents on the day.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com/ ), which sells a variety of solar products, has seen its stock price stabilize since December. Back in summer 2011 CSIQ traded for more than $12 but by last May it had dropped to $2.70 with a market cap of $117 million. CSIQ closed Sept. 25 at $3.01, up 2 cents on the day. It’s market cap is now $130 million.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR, http://www.sunpowercorp.com/) makes a wide variety of solar products and systems. SPWR stock in mid-May was trading for about $5. SPWR closed Sept. 25 at $4.60, down 14 cents on the day. Its market cap is now $547 million.

China-based LDK Solar Co. (NYSE: LDK, http://www.ldksolar.com/) manufactures solar products and silicon materials. LDK, which was trading for nearly $5 in late December 2011, dropped down to $2.85 in mid-May with a market cap of $373 million. It closed Sept. 25 at $1.25, down 4 cents on the day. Its market cap is now $167 million.

China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/) designs, manufactures and sells photovoltaic modules worldwide. It has a chart similar to many of the other solar stocks, which reached highs in the summer of 2011. Since we have been watching it carefully, we have seen in close in August 2011 at $15.88, in December 2011 it had dropped to $7.39 and by mid-May 18 it was down to $5.70 with a market cap of $464 million. It closed Sept. 25 at $4.47, up 7 cents for the day. Its market cap is now $316 million.

China-based Yingli Green Energy Holding Co. (NYSE: YGE, http://www.yinglisolar.com/) makes photovoltaic products including cells, modules and systems. YGE closed in mid-May 18 at $2.52. It closed Sept. 25 at $1.74, up 5 cents for the day. Its market cap is now $272 million.

Solar Stock Winners Hard to Find following Tariff News on Chinese Solar Panels

For the U.S.-based solar power industry, the news on May 17 was what many panel manufacturers had been looking for: the U.S. Commerce Department announced it was slapping a high tariff on solar panels from China (http://www.nytimes.com/2012/05/18/business/energy-environment/us-slaps-tariffs-on-chinese-solar-panels.html?ref=business).

While it was certain to “infuriate” Chinese officials, according to the New York Times, just how good the news was for the industry was hard to tell. More importantly for our blog, what does this decision to impose antidumping tariffs of more than 31 percent on solar panels from China mean for solar stocks? Based on the early reactions of the stock market and the fact that the overall market has been hit so hard in recent days, the results are difficult to read.

First, however, some of the fine print. This is a preliminary decision , not set in stone, and it won’t actually go into effect until October, if at all. There is some talk that it would be retroactive to February 2012, however.

Second, solar panel manufacturers based in Taiwan, like AU Optronics Corp., which has become a big player in the thin film solar panel business, won’t be affected. Third, some of the Chinese manufacturers like Trina Solar (which has moved its manufacturing outside of China and won’t be affected) and Yingli announced that their retail prices would not be affected by the tariff. So it will be interesting to watch what the Commerce Department actually does, what it all actually means and how the market reacts.

In the meantime, here are how some randomly chosen solar stocks closed on Friday, May 18, a day after the news broke. If there were real winners, like U.S.-based First Solar and SunPower, it was hard to tell by stock price.  Most of the China-based companies took an initial hit, but then stabilized.

Tempe, AZ-based First Solar (Nasdaq: FSLR, http://www.firstsolar.com), which specializes in thin-film solar modules, continues a drastic slide that began a year ago. Many insiders say their costs are  just too high and margins too low to stop the decline. FSLR, which traded as high as $142 last summer, has fallen all the way down to small cap territory. It closed May 18 at $13.66, down $1.26 for the day. It’s market cap is only $1.2 billion.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com ), which sells a variety of solar products, has seen its stock price stabilize since December. Last summer CSIQ traded for over $12 but by late August it had dropped to about $6.75. It closed May 18 at $2.70, down 25 cents on the day. Market cap is now $117 million.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR, http://www.sunpowercorp.com) makes a wide variety of solar products and systems. Like the rest of the industry, SPWR stock is now trading near the bottom of its 52-week range ($4.94-$23.36) and its market cap has dropped to $601 million. SPWR closed May 18 at $5.08, down 51 cents on the day.

China-based Suntech Power Holdings (NYSE: STP, http://www.suntech-power.com/), makes photovoltaic products and provides construction services. STP stock tanked on the news, tried to rally back briefly early in the day May 18, but ultimately closed at $2.00, down 13 cents on the day.

China-based LDK Solar Co. (NYSE: LDK, http://www.ldksolar.com/)) manufactures solar products and silicon materials. LDK, which was trading for nearly $5 in late December, closed May 18 at $2.85, down 6 cents on the day. Its 52-week range is $2.54-$7.90 and its market cap is $373 million.

China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/)) designs, manufactures and sells photovoltaic modules worldwide. It has a chart similar to many of the other solar stocks, which reached highs last summer but have been sliding for the most part since. It closed last Aug. 31 at $15.88 and by Dec. 23 it had dropped to $7.39. It closed May 18 at $5.70, down 38 cents on the day. Market cap is now $464 million.

China-based Yingli Green Energy Holding Co. (NYSE: YGE, http://www.yinglisolar.com) makes photovoltaic products including cells, modules and systems. YGE’s 52-week range of $2.75-$9.85 and its market cap is now $396 million. Like most of the other solar stocks, its best days were last summer. It closed May 18 at $2.52, down 28 cents on the day.

Solar Installations, Farms Catching On with Investors Big and Small

Don’t feel too badly if you are having trouble understanding the ups and downs of the solar industry. Take the Dec. 15 Business section of the Los Angeles Times, for instance. Right above to the headline “Grand Jury Investigating Solyndra,” and yet another story outlining the high-profile bankruptcy of the Fremont, CA solar panel maker despite $535 million in federal aid and $1.1 billion in venture capital backing, was another headline “Record Gains for Solar Industry” and a story noting that “solar power is a booming business in the U.S. ” along with statistics demonstrating the truly staggering growth of solar installations across the U.S. (http://www.latimes.com/business/la-fi-solar-growth-20111215,0,5390004.story).

But then you flip forward a few pages and there’s another report about solar panel maker First Solar, which fell 21.4 percent to $33.45 on Dec. 15, its lowest level in four years, after announcing its second restructuring in six weeks. First Solar, long considered a solar success story and the world’s largest solar company based on market cap (although its market cap has fallen almost 75 percent this year), released an earnings warning Dec. 14 suggesting that “downward pressure on solar panel prices and profit margins will continue ‘indefinitely,” according to the Financial Times.  The company’s basic problem is that there are too many solar panels on the market and countries in Europe, where solar is very popular, are cutting subsidies and will continue to do so.

“If you’re making solar modules, it’s very dicey out there. The prices keep going down, down, down,” said Philip Lawes, chief executive of Laguna Beach, CA-based Insoltech Solar.

But just go back a few weeks and you can read the reports about Google investing millions in solar power, and then there was last week’s news about Warren Buffett getting into the solar business for the first time. MidAmerican Energy Holdings, a unit of Buffett’s Berkshire Hathaway Inc., purchased the Topaz solar farm in California’s San Luis Obispo County from First Solar. Terms were not disclosed but the Wall Street Journal suggested Topaz was worth “more than $2 billion. If you scan the news further, you’ll see that Buffett isn’t the only one jumping into the solar farm business. First Solar and SunPower Corp. have been unloading their solar farms to some of the U.S.’s biggest utilities, including NextEra Energy, NRG Energy and Exelon Corp.

Lawes said the big investors like Buffett see long term income in the large solar farms.

“These solar farms, they aren’t glamorous, they aren’t going to be a home run, but they create a steady cash flow over the long term,” said Lawes, adding that Buffett’s company will enjoy that steady cash flow by selling the energy produced in the farms to a utility. “The utility companies aren’t going anywhere.”

Google and KKR must agree, since they recently announced a joint investment in four solar farms south of Sacramento, CA. The deal allows the solar farm developer and operator, Recurrent Energy, to raise cash and fund future solar farms. Recurrent has a 20-year contract with Sacramento Municipal Utility District to supply electricity to power 13,000 homes, according to a story in the Wall Street Journal.

There’s also opportunities for small investors, Lawes added. Entrepreneurs are approaching owners of commercial buildings offering in some cases to pay 15 cents a square foot for the use of their roofs. The entrepreneurs then install solar and sell the power to utility, just like the big guys with the big farms. “Typically, they just need a flat roof,” he said.

So, other than the big guys like First Solar, how are the smaller solar companies faring? Not that well if you are in the solar panel business.

China-based Suntech Power Holdings (NYSE: STP, http://www.suntech-power.com/), a smallcap that has boosted its market cap up to $423 million market cap in recent weeks, makes photovoltaic products and provides construction services. This stock closed on Oct. 20 at $2.07. By mid-day Dec. 23 it was trading at $2.34.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com/), which sells a variety of solar products, continues to decline. Back in late August it was trading for $6.74. At mid-day Dec. 23 it was trading for $2.85.

China-based LDK Solar Co. (NYSE: LDK, http://www.ldksolar.com/)) manufactures solar products and silicon materials. It, too, has bounced back from lows in late October of around $3. At mid-day Dec. 23 it was trading for $4.91, much closer to the highs of nearly $6 in late August.

China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/)) designs, manufactures and sells photovoltaic modules worldwide. It’s now trading for less than half its Aug. 31 close of $15.88. By Oct. 20 it had declined to $7.15. It’s up from there, but not much. At mid-day Dec. 23 TSL stock was trading for $7.39.

Shanghai-based JA Solar Holdings Co. (Nasdaq: JASO, http://www.jasolar.com) makes solar cells and other solar

 

products and has hit by the downturn. On Aug. 31 its stock closed at $3.66; by Oct. 20 it closed at $2.14; at mid-day Dec. 23 it was trading for $1.39.